Total Debt + Equity = USA Bubble #1

Most of the time, when economists or Wall Streeters present a continuum of who's worst (or best) in the world, they show just a part of the whole: whether it is total sovereign (public) bonds, total corporate bonds, securitized or non-securitized bank loans, or in some cases, equities, as a percentage of the host nation's economic output, or GDP. The reality is that all these are merely a part of the greater whole, and showing one independent of the others tells at best a small part of the story. For the full picture one always needs to show how all these add up combined to get what in corporate finance is known as "enterprise value", and what in economics McKinsey has dubbed "financial depth" or the value of the world's financial assets relative to GDP. It is here that it is clearest and most visible just how extensive the "bubblification" of the US capital markets - both debt and equity - has been, even despite the relative drop in consolidated "financial depth" in the past five years.

In short: think US is the biggest financial bubble in the world? You are right.

And for those who say there is still a long way to go before the global bubble - the consolidated global bubble, including equity and debt, is reflated back to 2007 levels, guess again - we are now at a new all time high of "financial depth."

Finally, while everyone is bombarded every single day with news that the global stock market is back to "all time highs", what virtually nobody knows is that when expressed as a percentage of global GDP, which in turn is driven entirely by new debt creation mostly by central banks, global equities as a % of global GDP are now 40% lower than their previous high achieved back in 2007!

Those who are familiar with the simplest concept in all of finance - Enterprise Value - will understand why in an environment of imploding free cash flow such as the current one, this is bad to quite bad.

The gold rally has not even started yet. You are flipping crazy if you are not buying this dip. They are adding as much money to the base money supply as existed in 1980 every 3 months. And with a 16 trillion national debt, they are going to be printing a whole lot more.

If they aren't trying to pay off the debt with all this debt issuance (it isn't money printing), what are they doing?

One has to understand the nature of money - it has two faces. One side is the asset side which consists of bank credit and physical money. The other side is the liability side - the principle and interest owed in order to create that asset money.

The international banking cartel is seizing the asset face of money from society while offloading the liability face of money onto society. If it a financial coup - quite literally.

You can't pay back unpayable debts by issuing more debt - that's as absurd as saying you can outrun a scooter that is programmed to drive 1 MPH faster than you are running at any given point in time.

It's likie saying one can extinguish their credit card debt by borrowing more from another credit card - absurd.

The false "money printing" meme has fooled many a person.

If you were Dr. Evil and had trillions in debt ownership, trillions in the asset side of money and were doling out 3% 30 year loans, would you inflate the currency away?

I wouldn't. I'd steal all the asset money and dump all the liability money I could while lying to the sheep to get them to buy all my assets at top dollar and then I'd pull the plug.

Everything crashes, but I wouldn't care because my front corporations are TBTF&Jail and my operatives are in government to protect me and mine.

My competition, though, would be wiped out so I could buy them up for pennies on the dollar.

My trillions in debt ownership would be there so I could foreclose on people and turn my paper into the physical reality - the entire point of the criminal debt money system from its inception. Those that don't know this simply are not illuminated, so to speak.

Whatever isn't mortgaged and driven into bankruptcy, I would buy with the trillions I looted from the arrogant chumptocracy... those who were unable to grasp the obvious conclusion once one actually did real research instead of picking international banking cartel option 1 or international banking cartel option 2. You won't hear reality on TV - so don't look there.

Once I rolled up reality under my mega corporate fronts and society is left destitute, then I'd give you that hyperinflation you want so dearly... but it won't matter - you'll be destitute and I'll own the Earth, so Debt Money Tyranny is no longer needed once its purpose was served.

The good news is the solution to whatever scenario unfolds is the same.

1. Learn how the mind is supposed to work and operate independently and then implement active literacy in your life. The Trivium is an excellent starting point:

But but iBama said on meet the press that the stock market is at all time highs so everything is fixed, while Michele was in the background with Beyonce, Flavor Flav, Jwho and Jballsack drinking Dom and Cristal!

Sarah Palin: " ... If we can’t stomach modest cuts that would lower federal spending by a mere 0.3% per year out of a current federal budget of $3.6 trillion, then we might as well signal to the whole world that we have no serious intention of dealing with our debt problem.

If we are going to wet our proverbial pants over 0.3% in annual spending cuts when we’re running up trillion dollar annual deficits, then we’re done. Put a fork in us. We’re finished. We’re going to default eventually and that’s why the feds are stockpiling bullets in case of civil unrest. ..." /from her facebook page, posted on Feb 26, 2013

Yes, the wealth distribution in that little video is the result of the supreme form of "wealth" being legalized counterfeiting by private banks, which then drove everything else to become runaway fascist plutocracy. Of course, now that 90% of the public gets their "news" from a handful of huge corporations, which, in turn are in debt to the banksters, there is NOTHING practical that can be done about this runaway social insanity situation. It must automatically get worse, faster, until its madness destroys itself ...

But ignoring for the moment the current, ongoing outrageous salaries, perks, vacations, work rules, etc. of .gov.union employees, we are on track in the United States to pay more money to 20 million public sector retirees – at an average pension of $65,000, we will pay these retirees $1.3 trillion per year - than we will be paying in social security to 80 million private sector retirees – at an average social security benefit of $15,000 per year that will cost less, about $1.2 trillion per year. Providing a level of retirement security to government workers that only the wealthiest 1% can enjoy in the private sector is not “protecting the middle class,” it is economic enslavement by government unions over the taxpayer.

I'd like to see where you get your figures from. Federal pensions (and we are talking federal-federal comparisons particularly since you brought up social security) are only $70 billion per year. I'm not saying there isn't waste and some pensioners receive far more than they deserve, but federal pensions are a drop in the bucket compared to other wasteful spending. At least most of these pensioners did *something* over their lives to earn those benefits, like go fight on a couple of wars, for starters.

I'm not a government union shill, btw. I'm just someone who feels compelled to stand against the divide-and-conquor strategy the government and elites are using against us. That you have bought into the hype, shows that, unfortunately, it is working. The fact that you got three up arrows shows there are others on here that want to believe this kind of misinformation...confirmation bias anyone? You were only off by an order of 17x or so on your pension estimate, so maybe I should cut you some slack.

NO, rustymason, your analysis is too superficial! Fascism/Marxism were both tools used by plutocracy.

More importantly, the "wealth" of that plutocracy was gained through the fraud of being able to make "money" out of nothing.

It is ALL organized lies, operating organized robberies, and can not be anything else. The only genuine solutions would be to change the dynamic equilibria between those. Tragically, those are changing NOW, towards runaway triumphant financial frauds, eventually destroying the whole system!

"and how do they do it" you ask? " and get away with it" is what i mean of course. obviously it's not with "paens to Enterprise Value." THIS is how you "rob the economy at large to pay yourself": http://en.wikipedia.org/wiki/Consumerism the idea of "mass consumption" is something invented by Banks and promulgated by the media..."a theory of wants, needs and desires...writ large." trust me when i tell you...this theory is OUT THERE. it can be summed up by the expression created in the 90's of "better, faster, cheaper" and it is the reason why what you see going on is not a figment of your imagination but feels "in fact real." there is no greater power in the world than "made to believe truth" and that's why the first area to be "mass consumed" was the media itself. by "writ large" i mean "lets talk bread. let's talk beer. let's talk computers and cell phones." all these things "exist" not as an actual number (ultimately) but as a "plan for ubiquity." it's greatest expression is the Apple "I-phone" and that's why if you don't read Karl Marx "you're not getting it." Unlike Marx himself (who was quite down on his theories...and rightfully so) this isn't true of New York and New Capitalism. "once they killed God anything was possible." there was always the "slight" problem if "financing said theory"...but this was "accomplished" via securitization of debt...something along with equities i take note is also "acting as a functional derivative only in reverse." in short...credit in the form of MONEY is in fact SHRINKING. thus not only must we ask "from whence consumption" given the collapse but "whence the FINANCING of said consumption" both present and FUTURE??!!!! and let me answer that question for you: GOVERNMENT. so while i coined the term "Securitization and its Discontents" what i really should be talking about is MONETIZATION and how "this only creates more Government DEBT" which acts like a lead weight on any incipient or even perceived recovery. apologize for being so abstract here...the whole thing is a real bear for me to wrap my mind around. "with derivations" of course. i would categorize the current "theme" as "high end Sovietski" since even the State itself is being financed "in THEORY." the DEBT is the only thing in ACTUALITY being financed! no wonder Wall Street "took off right out of the gates." if the only Government you have to worry about is one that only services its debt...well, we don't have much a Government do we? Which simply BEGS the question..."how's the economy doing?" because it is THOSE theories that are "financing everything." trust me when i tell you..."there is no ubiquitous theory of economics." that's why not even GOLD seems to be working under this scheme since "if it doesn't exist for buyers of significance" (Germany comes to mind) nor is used as part of "ordinary" or "regular" life "then the pricing function ceases to become a function of inherent value." (go talk to your local jeweler and ask them how sales are doing.) not saying i'm right...if i am it will be noticed/obvious to all. to me these are CLASSIC symptoms of a DEFLATION. from "i can't get it at the price i want" to "these prices are too low. there is no value here and i'm incurring a debt to buy it" might seem pretty minor...but how many things in our lives do we say "boy, i'll be paying for this forever" to? i would argue THAT form of ubiquity is on the verge of becoming...PERVASIVE. my solutions have of course been anything but academic: natural gas, cloud computing systems, solar tech, 3 dimensional printing. they ALL share a similar trait now as well (been spouting this going on 4 years now save for the 3 d printing) namely prices have FALLEN dramatically. it's all "cut from the same cloth" though...simply put "the only financing scheme for Government debt that works is a growing economy." PERIOD. so now it's "blame the lack of Big Spenders" yada yada yada. I say "their theory has some problems" and THAT'S the problem...not anything Congress should (like exercising OVERSIGHT) or should not be doing.
here's the Bobby "bland" version: http://www.youtube.com/watch?v=Hq3cYcEfJtY
and the Eric Clapton version: http://www.youtube.com/watch?v=-1hhOyD5hkI i'll let you all judge for yourself which one is better.

"Thousands of California's paroled child molesters, rapists and other high-risk sex offenders are removing their GPS trackers and receiving very little consequences. A Los Angeles Times investigation ....."

Remember the good ol' days when you needed to be a felon to be watched and monitored all the time? Cell phones, tablets and new cars are all GPS monitors. And if the Utah data center recording all your calls and emails isn't enough now the drones overhead...

Yes Child rapists are going free due to lack of enforcement of the terms of their parole, yet most cops are engaged in a stupid fucking war on drugs. No, I don't mean at war with the great drug cartels that bring in dope and distribute it, hell no, they are at war with the little people who use a little dope and mostly mind their own business. The criminals who rob to fund a drug habit exist, yes, but they are a small part of the whole thing, and if they break the law they should be arrested.

But the drug war is a jobs program for cops, federal agents and prison guards. Prisons filled with users and child molesters feel free to drop their GPS trackers? Why not, this system is so fucked up it doesn't deserve to exist! Cops, prision guards, federal agents, lawyers, judges all of them are waging a drug war because it supplies them with nice fat paychecks at tax payer expense. In short people pay to be arrested for smoking a joint and taking a pill the doctor didn't wrtie a prescription for!

Of all the problems America has, the little guy doing a little dope ain't ONE OF 'EM!

Since the biggest gangsters are the banksters, which control governments, everything ends up serving them.

The banksters benefit all the way around from causing politicians to promote the "war on (some) drugs." The biggest banks launder the profits from the black market with relative impunity, while the smaller players can be attacked and put out of business. As the runaway fascist plutocracy drives social polarization, the "war on (some) drugs" provides endless excuses to build the fascist police state which is required to defend and advance the interests of the fascist plutocracy.

However, to understand this more deeply, one has to go through the Bizarro Mirror World. The first step is to recognize that the governments are the best organized territorial criminals, covertly controlled by the best organized international criminals. The next step is to stop believing that anything else is ever possible, but rather, that ONLY dynamic equilibria between different systems of organized lies, operating organized robberies, are ever possible.

This article above is about how America became the world's "leader" at being controlled by force backed frauds. We should go through quantum leaps, to radically different paradigms, with respect to the basic understanding of all this! (Not that I believe we will, since first comes the likely collapse into chaos, due to too much "success" at controlling civilization with coercions backing up huge lies, which causes that civilization to base everything it does on what is false, which is a terrible long-term foundation, although wonderful for the few in the short-term that benefit from those frauds.)

We should understand that money is backed by murder, and that it can never be otherwise. What has happened is that the best organized covert gangs of criminals have long ago taken control of civilization, BECAUSE THAT IS WHAT CIVILIZATION IS, AND MUST BE! Meanwhile, the best organized gangs of criminals have advanced bogus bullshit religions, to brainwash people to believe in impossible ideals, which always backfire, and cause the opposite things to happen in the real world. The money system became the state religion, which has triumphed inside the context where that bullshit is only fought with other bullshit, through various other old-fashioned religions and ideologies.

There are level after level after level of deceits within the endless war against consciousness waged by tiny minorities against the vast majorities. The "war on (some) drugs" was one of the ways that there was waged a war against consciousness, whose purpose was to keep most people ignorant and afraid, so that they could be controlled and exploited.

The single simplest symbol and most extreme example of this was taking the best plant on the planet for people, hemp, and rebranding that as being "marijuana, which is almost as bad as murder." The "war on (some) drugs" was just another one of the endless series of tricks promoted by the banksters, because they have arranged things so that they can profit from every evil thing that they can possibly do. Asserting that the single best plant for people was almost as bad as murder, and then backing that huge lie up with violent law enforcement for decade after decade, fits into the overall systems of debt slavery, backed by wars based on deceits.

The USA is being sucked into the whirlpool, or being flushed down the toilet, of the triumph of financial frauds empowering an apparently endless series of other frauds, through level after level, of an apparently infinite tunnel of deceits. However, it is important to NOT believe in false fundamental dichotomies, and their related impossible ideals, as somehow providing genuine "solutions" to these problems.

The ruling classes are providing a set of expedient solutions to chronic political problems which are inherent in the nature of life. Their quick and dirty solutions to those problems benefit them, while screwing everyone else. However, the ruling classes did not create those problems out of nothing. Those problems are due to basic human ecology, and real environmental limits, not due to merely individual psychology, through elites "choosing to be evil," while others "chose to be ignorant."

THIS IS THE SOCIAL PYRAMID SYSTEM OF NEOLITHIC CIVILIZATION, BEING ASTRONOMICALLY AMPLIFIED IN SIZE!

Should any government begin to be restless, and unwilling to accept the axiom that it should have no real say in that most serious matter of all, monetary emission, the line of communication from the god in heaven to the people, then it would be but a short time before private money creative power transferred its favours to the so-called opposition. Funds would be made available sufficient to guarantee under normal circumstances their winning the “Election” and their consequent assumption of the government. At the same time funds would be withdrawn from the “Political Party” previously in control of the “government”; which would very likely mean that, in the following confusion, men more “suitable” and “pliable” would force their way to the top; so that even if that particular government was reelected, private money creative power would have no further fears. The price was always continuance of those policies most needed by such private money creative power necessary for its own real purposes, and therefore the continuance of its hegemony.

THAT HISTORY IS WHY THE GOVERNMENT OF THE USA DOES WHAT IT DOES!

THE FUNDING OF THE POLITICAL PROCESSES MAKE IT PRACTICALLY IMPOSSIBLE TO ACTUALLY DO ANYTHING EFFECTIVE TO RESIST THAT RUNAWAY SOCIAL INSANITY.

Only a civilization that was crazy, and corrupt to the core, would have criminalized cannabis. Everything that a society controlled by huge lies does becomes increasingly insane, on a runaway path towards madness and eventual self-destruction. The "war on (some) drugs" is more than 75% against "marijuana." That illustrates the consequences of the triumph of huge lies controlling civilization. However, given that those who benefit from the frauds then have the most money to continue to corrupt the political processes, there are apparently no practical solutions, other than to watch and wait as this juggernaut automatically gets worse, faster, and turns more people into its road kill.

I enjoy reading Zero Hedge articles such as this one, which reveal more of the actual social facts than one will ever see presented in the mainstream mass media. However, by and large, as far as I can tell, it is a waste of time to bother to learn about any of this, since nothing significant is going to be able to be changed. The only thing that happens is that one may understand better the disease that one is being killed by, but otherwise not able to provide any practical remedy for that.

Overall, it seems that the masses of people are becoming even more political idiots than before. Furthermore, there is barely the slightest sign of any public understanding of the deeper problems, which the ruling classes are resolving in their expedient ways. The "war on (some) drugs" segued from the history of slavery and racism, and so, merely became a more sophisticated system of social slavery. However, there were always deeper environmental reasons WHY that social slavery system evolved. So far, in public fora I find nothing but superficial criticisms of the evils of the elites who are running their sophisticated social slavery systems, while I find practically nothing in the public spaces addressing the deeper human ecology problems, which would still have to be resolved somehow. Of course, that also applies to the abuse of children, in similar ways that it applies to everything else! Attempts to apply impossible ideals and false fundamental dichotomies to those problems are guaranteed to continue to backfire badly, as they do everywhere else!

However, since the financial systems are based on triumphant frauds, which have completely taken control of governments, we are many, many light years away from any methods of resolving social problems in any truly superior ways. That is actually so bad that there is almost NOTHING in the ways of deeper understanding of those problems present, even on way better than average Web sites, such as Zero Hedge. Of course, in the mainstream mass media, that brainwash 90% or more of the people, even the existence of those problems is denied, which means that there are no solutions possible.

The USA appears to be proving the saying that "the bigger they are, the harder they fall!"

Debt remains the same, unless extinguished by default, inflated away or paid down. Asset prices vary from day to day. All assets can never be sold or converted to cash at the same instant. In other words, the value of assets cannot be guaranteed. The cost of debt is always rising as interest is added, until the debt is paid off. If we never borrow another dollar or pay down principle, the debt still rises. Never mind, the fat cats in Washington will survive no matter what happens. Buy stocks and hope like hell there is another sucker in line to buy behind you.

America is in a giant debt bubble. Yet most Americans think this is business as usual and can go on forever. In fact the tiny cuts made in the sequester are causing those dependent on tax payer money to scream like scalded dogs!

We will blow up. I said several years back that Europe, the EU, would blow up. Most said "No, it won't happen." Ha! Look at Italy today! Look at Spain. Look at Ireland! Look a Portugal! Look at Greece, a failed state now. Look at the money printing madmen in the UK, they will not get away with this money printing much longer. France is a ticking time bomb. And the states of the former Eastern block are dead in the water. Europe. Fuck! They are all toast. Except perhaps Germany and the Swiss. Scandinavia has hope, but as the rest of Europe burns, people will all try to move there!

So, to sum up: Bernanke inflates the stock market with (multiple) QE-gasms, and shores up foreign banking, and those people who invest in the obviously inflating stock bubble are the bad guys owning all the "wealth".

Well, it'll be interesting to try to spend that wealth in a year or two. The thing about income distributions is that no one is ever happy with them. If you're poor, everyone else is rich. If you're rich, well, who fucking cares? But if you're the majority in the middle, you see some kind of, well, dysfunction at both ends of the curve.

But it might just be that reality is the normal curve. Everybody can't be a ka-jillionaire, but even the average Joe can earn over a million bucks in income over the course of his life. Average Joe might even be able to leave some of that wealth to his or her heirs, if he weren't taxed as highly as he was all his life, and wasn't forced to pay the IRS a penalty for dying on his after-tax earnings he managed to save despite the best efforts of the Fed and the USG.

The goal is not a fairer distribution. That just creates exactly what we have now - a re-distributionist central gov't that's hell-bent on creating fairness by raising generations of people who think that someone else should pay for their food, clothing, shelter, iPhones, and personal lubricants. Not mentioned in the video is that half the country pays no net income taxes. Of the half that do pay, the top 50% of those pay 97% of all income taxes collected.

Now: In the interests of fairness - if we remove "wealth" in whatever form it exists in the 1%, and re-distribute it, that wealth will be a smaller pile of income to tax. Some of that tax burden will be transferred now to the more-fairly-treated middle-income and poor, who will still be paying a lower rate of tax (for the most part), so tax revenues will decrease even further.

The Future: All of this seems to be a plan not to re-distribute, but to lessen incomes at the high end. Decreasing those incomes in the interest of fairness is the goal. That means that it's a zero-sum game in Barry's Economics World, a world where the pie does not grow, it cannot grow, it can only be sliced, and he and Joe Biden are just the guys to start in with the night of the long knives.

Joe Biden finally said something I can agree with, even if he doesn’t! He said that Americans have the freedom to be stupid. Obviously both he and Obama believe we are stupid but I don’t think they want us to be free to act upon our stupidity. Freedom is a messy thing, and yes, the mess we are in is because a lot of people did stupid things. Yes, they were enabled by the worst of us for their own enrichment, but none the less, we did it. The stock market, subprime loans, and Obama are some of the stupid things we did to ourselves. I’m sure Obama sees the fact that so many voted for him as less a sign of enlightenment as another sign of stupidity. Obama loathes us for our stupidity and has taken it upon himself to correct our founding father’s mistake of allowing us the freedom to be stupid. He will fundamentally change America, and possibly the world.

We could correct our own problems and our forefathers saw the solution. It was education. The best way to have freedom AND prosperity is to have an educated population. And I’m not necessarily referring to engineering or political science. I’m referring to educating us to the reality of the world. History with all of the ugly spots included. Math and health sciences that allow us to balance a checkbook and know what to eat and not. Our current education system is producing some really bright people when it comes to technology and also a ton of dim bulbs that have not a clue. They have been indoctrinated by “progressives” thatmake them believe that economic justice will put food on their table. The have been indoctrinated by media to believe that consumerism and sexual fantasy is the only path to happiness. Until people can know when they are being lied to and find contentment within themselves we are doomed.

If you claim to practice the presumption of innocence, you must enslave suspectsbefore they become criminals (which happens at sentencing ... after the trial). So very humane. Then you get to pay for their trial and incarceration, and later for their welfare for the rest of their natural lives, as no one will employ them. The most enlightened criminal justice system ever ... is just another scam which serves to increase total debt and solves nothing.

Don't be tranquelized by the MSM who will tell you printing trillions is actually normal - that everything is getting better.

Remember Fukushima - previously a meltdown was understood to be a catastrophe - but when you had multiple meltdowns the MSM would have you believe it was actually good for the planet!!!

Remember the gulf oil spill. The MSM just basically ignored it. So it would appear there was no harm done - no need to worry about oil spills. Heck they are actually good for the oceans!!! After all oil is naturally occurring right.